BMO Covered Call Dow Jones Industrial Average Hedged to CAD ETF - ZWA

ETF Overview

The fund has been designed to provide exposure to a portfolio of Dow Jones Industrial Average companies, while earning call option premiums.

The Fund invests in securities of the Dow Jones Industrial Average, and dynamically writes covered call options. The call options are written out of the money and selected based on analyzing the option's implied volatility. The option premium provides limited downside protection.

The underlying portfolio is rebalanced to maintain better representation of the broad market and of American industry and options are rolled forward upon expiry.

In addition, as ZWA may hold other underlying ETFs, the management fees charged are reduced by the management fees paid on the underlying ETFs, thereby not duplicating the management fees.

Key ETF Data

Fundamentals
Category (main)	Active American Equity Income and Covered Calls
Category (other)	Active Equity & Covered Calls
Underlying Index	No Index
ETF Structure	Active management. No index
Asset Class	Equity Income and Options (Covered Calls)
Region	USA
Issuer	BMO
ETF Home Page	Available here

Fund Facts
Inception Date	Oct 20, 2011
Total Holdings	61
Distribution Frequency	Monthly
Leverage	None
Significant Currency Exposure	Yes
Currency Hedging	Yes

Fees
Management Fee	0.65%
Management Expense Ratio (MER)	0.72%

Trading Information
Ticker	ZWA
Exchange	TSX (Toronto Stock Exchange)
Currency	CAD

Eligibility
Eligibility *	RRSP, RRIF, RESP, TFSA, DPSP, RDSP
DRIP available **	Yes
PACC Plan available **	Unknown
SWP available **	Unknown

* Always check eligibility with your plan operator as plans and accounts can differ

** Not all brokers can facilitate these plans. Check with your broker.

Current Price, Fund Performance, Yield, NAV, Charts etc

To view the TSX or Morningstar fund page for this ETF click on the Fund Data menu tab or below:

ETF Analysis

Covered Call Strategy ETFs typically have a dual strategy: they try to replicate the returns of an index, and sell covered call options on some/all of their holdings.

The upside of selling covered call options is that the fund earns a premium for each option sold. The downside is that the upside potential of the ETF is limited due to the covered call option selling.

Before buying an ETF that uses a covered call strategy ensure you understand how such strategies work, and are comfortable with its advantages, risks and limitations.

Options are a somewhat complex financial instrument. They are relatively easy for some investors to understand, difficult for others. Since Covered Call Strategy ETFs use options, it would be wise to understand how they work before investing in any Covered Call Strategy ETFs.

Also understand the amount (if any) of Return of Capital the fund may pay out with distributions. ROC payments reduce your holding's capital.